Labour donor profits from car-tax scheme

A German company set to cash in on Labour's new motoring tax has been revealed as a major donor to the Labour Party and Tony Blair's favourite think tank.

It emerged that Frankfurt-based T-Systems, which has pioneered technology to spy on motorists by satellite and charge them by every mile driven, gave more than £10,000 to Labour last year.

The firm, part of Deutsche Telekom, has also given £45,000 to the Institute of Public Policy Research, one of the main cheerleaders for the 'road pricing' plan.

Last night the Conservatives seized on the donations as the row over the proposed scheme - which has triggered a mass revolt - escalated further.

Some ministers are privately worried that charging motorists by the mile could turn into the party's equivalent of the poll tax.

Last night, the number of people signed up to a protest petition on the Downing Street website approached 1.4 million.

One Government source pointed to Labour's embarrassing defeat in a by-election in Dunfermline & West Fife last year, which party strategists blamed on anger at proposals to impose a £4 road toll to cross the Forth bridge.

'Drivers do not like tolls, it's as simple as that,' said the source. 'We are making a real mess of selling this as an idea.'

The links between one of the firms likely to bid to run any UK scheme only stoked the controversy.

T-Systems gave £10,575 to Labour last July, and is also a major backer of the IPPR, a think-tank with close links to Downing Street.

Tory chairman Francis Maude said: 'There are questions to be answered when a company that would be in poll position to bid for a national road pricing scheme has been making substantial donations to the Labour Party and Tony Blair's favourite think tank.'

T-Systems has developed GPS satellite technology which it boasts can pinpoint the position of any given vehicle 'in the blink of an eye'.

A receiver on board the vehicle informs a 'toll collect' centre, which charges drivers.

The idea of a nationwide road pricing scheme has been mooted by transport experts for a decade. But suddenly road pricing, which supporters claim would cut congestion and greenhouse gas emissions from vehicle exhausts, has emerged as official Labour policy.

The staunchly Blairite IPPR has helped put the policy on Labour's agenda. It has run a year long project examining how road charging could be sold to sceptical voters.

The budget for the project was £135,000, around a third of which was paid by T-Systems.

The firm already operates a £2billion-a-year German road-charging system where HGVs are charged 13p a mile on autobahns.

Industry experts claim T-Systems would be in a leading position to win the UK contract, which is likely to include all traffic.

The IPPR dismissed any suggestion that it had been influenced by the donation from T-Systems. A spokesman said it had published ten reports calling for congestion and road charging since 1989.

'The findings of our research are the responsibility of the authors alone and do not represent the views of our funding partners,' he added.

'We are completely open about who funds our research and we have legal agreements which make clear that we are solely responsible for our policy recommendations.'

No one from T-Systems was available for comment.

Another firm with close links to Labour oversees London's congestion charge, considered a model for new congestion tolls.

Capita Group has been awarded contracts worth hundreds of millions of pounds by New Labour.

Chairman Rod Aldridge resigned in March because of publicity surrounding his decision to lend £1million to Labour in the run-up to last year's General Election, insisting suggestions that the money had resulted in Capita being awarded Government contracts were 'entirely spurious'.

He was one of 12 donors who lent Labour almost £14 million before the Election.